Lower of Cost or Net Realizable Value

The accountant for Murphy Company prepared the following analysis of its inventory at year end:

Item Units Cost per Unit Net Realizable Value

RSK$-89013540$ $$38$ $$44$

LKW$-912473294945$

QEC$-574294622533$

Required:

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$1.$ Compute the carrying value of the ending inventory using the lower of cost or net realizable value rule applied on an item$-$by$-$item basis.

$fill in the blank $113$eb$80$c$900$cfad$\_1$

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$1.$ Compare actual cost of inventory to its market value. The lower amount is the value of inventory. If market value is lower, the inventory account is adjusted.

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$2.$ Prepare the journal entry required to value the inventory at lower of cost or net realizable value. If an amount box does not require an entry, leave it blank.

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Cost of Goods Sold Cost of Goods Sold

Inventory Inventory

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